The Aid System: Does ‘Mutual Accountability’ Encourage Outcomes?
Panel Discussion at the Civil Society Forum at the World Bank and IMF Board of Governors
Meeting
Moderator: Sam Worthington, President, Interaction
Panelists: Nancy Birdsall, President, Center for Global Development
Hilde Johnson, Deputy Executive Director, UNICEF
Donald Kaberuka, President, African Development Bank
Max Lawson, Head of Development Finance and Public Services, Oxfam Great Britain
Istanbul, Turkey – 4 October, 2009
Event Description:
The development community has identified and promoted several principles, embodied in the Paris
Declaration and Accra Agenda for Action, to make development assistance more effective. A
principle that has been one of the focal points of these reform efforts is the promotion of mutual
accountability between funders and developing country governments. Has that focus on mutual
accountability of funders and recipients to each other distracted them from their accountability
respectively to their taxpayers and their own citizens? Has that focus encouraged concern with inputs
rather than outcomes? At this event, we discussed accountability relationships in foreign aid in the
context of an emphasis on outcomes.
Discussion Overview:
Sam Worthington opened the event by stating that there are advantages and disadvantages to donor
efforts to increase accountability of governments to donors. He compared this effort to foster
accountability with efforts in place within nation-states. The key different is that the accountability
linkages are broader in nation-states, and they exist from the bottom-up as a result of the
accountability mechanism introduced when donors have citizens pay taxes. Sam then introduced the
panelists and asked each to share brief comments on the issue.
Nancy Birdsall argued that the mutual accountability of aid programs is a derivative of the more
critical accountability linkage. She argued that a stronger focus on outcomes can promote not only
mutual accountability, but more importantly, the accountability of governments to their people. She
described an approach called Cash on Delivery (COD) Aid. It is an outcomes-focused aid modality
that she and her colleagues at the Center for Global Development have developed. Under COD Aid,
donors commit to pay for a specific measure of progress on outcomes, and recipients commit to
publish data on the specific development outcome for their citizens. The approach locks donors and
developing country governments into acting upon promised reforms of aid while generating
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information civil society can use to assess and advocate for a more effective provision of public
services.
Hilde Johnson discussed the relevance of this topic in the context of the current financial environment,
shared some examples of UNICEF’s efforts to focus on outcomes and promote accountability to
developing country citizens, and commented on the COD Aid approach. She said that under current
financial stress, there seems to be a return to donor-driven approaches and a recurrence of ear-marking.
And when donors focus on results, they often do so to increase attribution of their work. To counter those
pressures and continue improving the outcomes of development projects, UNICEF has worked on ways to
utilize technological innovation, such as reporting on the timeliness and quality of public services through
the use of Rapid SMS. This technology can be used also to increase accountability and effectiveness in
government. Another mechanism used by many developed countries is called Publish What You Pay,
where transfers of funding provided to service providers (e.g. schools) is published with the intent of
promoting bottom-up accountability. Finally, Hilde commented that COD is a promising approach
because it helps focus on results and secure long-term commitments from donors. She is, however,
concerned that it may focus on quick wins and not draw attention to marginalized people, that it may lead
to the use of short-term approaches to increase progress to receive funding rather than sustainable
interventions that will lead to long-term sustainable progress, and she mentioned potential drawbacks of
vertical approaches to development.1
Max Lawson discussed how to better focus and make more effective the discussion of mutual
accountability in aid relationships, and he also commented on the COD Aid approach. He argued
that recipient country governments should be encouraged to become more focused on the interests of
their citizens. He urges that donors be held to account for improving their approaches to providing
aid. He argues that they should provide more aid for longer terms and as budget support. He then
compared COD Aid to an aid approach launched by the European Commission several years ago
called Millennium Development Contracts. Millennium Development Contracts, which have six
year terms, provide general budget support through two tranches – one fixed and one variable. Twothirds of committed funding is provided as fixed, and one-third is variable depending on recipient
country performance which is linked to several outcome and output criteria. He argued that the aid
provided through the variable tranche is similar in principle to COD Aid.1
Donald Kaberuka argued that the current financial crisis should be a catalyst for increased efforts to
enhance the effectiveness and impact of foreign aid. He cautioned that as economic conditions will
remain poor in the immediate future, it will be increasingly important to hold donors to account for
financial commitments they have made to developing country governments. He expressed his strong
support for efforts made to focus on outcomes, and advocated for these approaches to inform practice
beyond the health and education sectors, in particular infrastructure and governance. In conclusion,
he stressed that the financial crisis is not sufficient reason to shift focus away from results and
accountability linkages, but that it should instead act a catalyst for further reforms.
Sam Worthington opened the discussion by asking each of the panelists questions specific to their
institutional and regional perspectives. Hilde Johnson commented that while she was the Minister
for International Development of Norway, there was a huge shift to reporting and focusing on
outcomes instead of inputs to Parliament. Now, as UNICEF is both a donor and recipient, her
institution is in a more precarious situation than bilateral donors, and a focus on results will become
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For a discussion of how COD Aid compares and differs from the EC Millennium Development Contracts, please
read this blog discussion on the Oxfam GB website.
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increasingly important during this financial crisis. Donald Kaberuka noted that bilateral agencies
have greater flexibility to innovate than do the multilateral banks and agencies. The later are subject
to the fiduciary constraints defined jointly by their shareholders and, as a result, tend to align with the
most prescriptive country requirements. This limits the scope for innovation. He also stressed that
the growing trend towards introducing new vertical programs without a corresponding growth in total
aid, which not only impose additional transactional burdens on beneficiary countries, but also reduce
resources available for country-owned programs. Nancy Birdsall said that for all their disadvantages,
vertical programs are very attractive in the US, and outcomes-focused aid approaches are useful tools
for aid advocates especially in the US to tell legislators and the public what aid is doing. Max argued
that there is utility in transparency of aid transactions even if it enables aid critics at times to find
support for their efforts.
Sam Worthington then opened the discussion to the audience. The Director of Publish What You
Fund, Karin Christiansen, explained how transparency of donor transactions is critical for both aid
recipients and taxpayers in donor countries. She said that donors cannot control accountability in
aid-receiving countries, but the development community and taxpayers can better understand
whether interventions are helping achieve this through greater donor transparency. An audience
member highlighted the challenge presented in countries like Pakistan where there may be no
participation by civil society in designing development programs, but some donors will continue to
provide a great deal of assistance to the country because of particular circumstances. Another
audience member said that there needs to be greater discussion of the accountability of donors and
developing country governments to the citizens of those poor countries, and she highlighted the need
to engage donors that are not adhering to the standards established at the high-level aid effectiveness
meetings in Accra and Paris. Staci Warden, Executive Director of Global Sovereign Coverage of
JPMorgan Chase Bank, said that in the case of COD Aid, though the mutual accountability
relationship will still be maintained, the approach is likely to increase accountability within
governments because different ministries may hold the national government and other ministries to
account for providing them with resources that will help the specific ministry to make progress
towards the COD Aid goal.
Each of the panelists followed with closing reactions and statements.2 Hilde Johnson closed by
saying there is a need to engage in more participatory approaches because even in poor countries,
people understand the issues and can take action to improve development outcomes. Max Lawson
emphasized that donor alignment with recipient country budget-cycles was key, and could help
promote a virtuous cycle. Nancy encouraged participants to read the forthcoming book Cash on
Delivery: A New Approach to Foreign Aid with an Application to Primary Schooling for answers to
the questions raised during the discussion. She also advocated that donors support participatory
engagement in developing countries by supporting universities, think tanks, and scholarships rather
than through more intrusive means. Sam closed the discussion by summarizing three points
emphasized during the discussion: 1) a need for more attention to the democratization of
development initiatives; 2) a need to better engage citizens in the North; and 3) a need to increase
focus on outcomes.
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Due to an overlapping engagement, Donald Kaberuka departed prior to closing remarks.
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